American General agrees to reinstate a grieving N.J. family's life insurance policy

JENNIFER BROWN/THE STAR-LEDGER Yoel Mayerfeld with family photos. His father's life insurance company canceled his father's policy after the elder Mayerfeld was late on a payment as he cared for his dying wife.

Nobody wants to burden loved ones with money problems when they die.

Life insurance payouts won’t take away the grief, but they can help relieve the financial strain on those left behind.

That’s what Albert Mayerfeld, 75, was counting on for his family.

When he was 59, the Elizabeth man purchased a whole life insurance policy from American General Life Companies — AIG — with a $100,000 death benefit.

"It gave my father peace of mind to know his final expenses would be taken care of,’’ said Yoel Mayerfeld, 34, one of four Mayerfeld children.

But a series of catastrophic health issues threw the family into turmoil and a life insurance premium was paid late. The family was left with nothing — until Bamboozled stepped in.

Here’s how it happened.

FAMILY BEFORE BILLS

PHOTO COURTESY OF THE MAYERFELD FAMILY Albert Mayerfeld and his wife, Liesel, in a 1961 family photo.

In December 2008, Liesel Mayerfeld was diagnosed with terminal breast cancer. She was given less than a year to live.

Albert Mayerfeld stopped working to care for his wife, and the couple’s days were spent at doctor’s appointments and chemotherapy treatments. By June, Liesel was in the hospital full-time, and Albert remained by her side.

During an early July visit, Albert Mayerfeld showed his son a letter from American General Life Companies. The letter acknowledged a payment of $1,003.68, but said because it was late, Albert’s policy was canceled.

Yoel Mayerfeld called American General, which said Albert could complete a reinstatement form with a medical verification stating that Albert’s health had not changed. The policy would then be reinstated.

Albert saw his doctor the following day. The doctor verified there was no change in Albert’s health, except that he was older. (Albert had been a diabetic since his youth, so that was already on record with the insurer.) They mailed the form the next day.

On July 8, the check for $1,003.68 was cashed by American General. The Mayerfelds thought all was well.

In the meantime, Liesel’s health was deteriorating, and at the end of August, she started hospice care.

On Sept. 19, while celebrating Rosh Hashanah with his family in Ohio, Yoel received a phone call. His father died suddenly of a dissected aortic aneurysm, an uncommon and often fatal heart ailment.

After the family sat shiva for their father, Yoel Mayerfeld went through his parents’ mail, finding an unopened letter from American General, dated Sept. 17, two days before Albert’s death, rejecting the policy reinstatement.

"I thought my grief was making me hallucinate,’’ Mayerfeld said. ``I thought this company cannot be that heartless and unethical. I just kept thinking, ‘They cashed the check! How could they do this now?’" Mayerfeld called American General but got nowhere.

He filed a complaint with the New Jersey Department of Banking and Insurance. He sent letters of support from the nonprofit CancerCare and from Saint Barnabas’ Hospice and Palliative Care unit. Both organizations confirmed Albert Mayerfeld had been caring for his wife, noted the stress of caregiving and asked that the insurer show compassion.

The insurance company told Yoel Mayerfeld it was reconsidering the policy cancellation.

On Oct. 21, he was told the answer was no.

Five days later, Liesel Mayerfeld succumbed to her cancer.

Yoel Mayerfeld said he was barely able to mourn before the implications of the canceled life insurance policy became clear.

There were bills. Lots of bills: more than $80,000 for funeral home expenses, medical equipment for Liesel and other health care costs, unpaid property taxes, roof repairs and more. The $100,000 policy would have covered it.

HAVE A HEART... PLEASE?

Bamboozled contacted American General Life but it refused to talk details, citing confidentiality concerns.

"We believe we have acted fairly and consistently within the provisions of the contract,’’ said American General spokeswoman Shayna Schulz.

We called around to see what standard procedure is in cases like this. Several life insurance companies and brokers said it’s common for companies to accept late premiums, especially when there’s evidence the insured had a reasonable explanation and no change in health status.

Albert Mayerfeld’s health, according to his doctor, had not changed, except that now he was 75. Perhaps the company decided Mayerfeld’s age made him too great a risk, and it took this opportunity to drop him.

Of course American General isn’t in the business of giving money away, but we’re not talking about a multimillion-dollar policy. It’s $100,000 — not much to a company with billions of dollars under management, but it’s everything to the Mayerfelds.

Was the premium late? Yes.

But American General Life cashed the check. That bears repeating. The insurer cashed the check. A reasonable person might think that by accepting payment, the insurance company implied the policy was in good standing.

We asked again. The answer was no. Yoel Mayerfeld started researching attorneys.

Then, we got the phone call.

"We decided to reinstate the policy and will be paying the claim,’’ said American General’s Schulz, who didn’t offer any more detail.

Most awesome. Thank you, American General, for doing the right thing.

Mayerfeld was relieved when he heard the news.

"I thought it would go to a lawyer and we’d eventually get some kind of settlement. I feel vindicated,’’ he said.